Everest Engenharia: Brazil’s shift from single to multi-tenant towers

Everest Engenharia has over eighteen years of experience in tower manufacturing and is now offering comprehensive solutions - from site surveys to maintenance - to its wide array of clients in Brazil.

In this exclusive interview, Eduardo Dos Santos, VP Strategy of the company, shares his views on what it takes to be a leading turnkey provider in one of the most exciting and challenging telecom markets in the world.

TowerXchange: What products and services does Everest Engenharia provide to carriers and tower companies in Brazil?

Everest Engenharia is able to offer full services to carriers, towercos, broadcasting companies and OEMs. We manufacture towers and poles as well as serve our customers as a turnkey provider. Specifically, we offer technical analysis of projects viability which include full analysis of towers and poles design and foundations, civil construction, structural analysis, diagnosis and reinforcement. We are increasingly engaged in the design and construction of rooftops and mobile easel tower projects.

As a turnkey provider, we offer management and construction services such as survey, electrical and hydraulics work as well as grounding. In the field service area, we serve our customers as advisors and consultants and link them with top suppliers to cover due diligence works, preventive and corrective maintenance as well as emergency services.

TowerXchange: In terms of due diligence, what happens when a towerco buys a portfolio? What type of services do you offer?

Typically, we work with towercos during the due diligence process to collect information on each site such as number of tenants, remaining capacity, structural conditions et cetera.

We have done comprehensive due diligence for SBA Communications and for carriers such as Vivo and TIM in the past and hope to acquire the contract for the recently purchased Oi’s portfolio.

Everest offers site survey services to carriers prior to the sale of a portfolio. By collecting up to date information on their sites, carriers will be able to negotiate a better price during the sale process.

TowerXchange: How long does it take to survey 2,000 towers?

For TIM, we surveyed 2,000 towers in approximately four months. These towers were all located in the Southeast of the country and therefore, were easily accessible and not too far from each other.

Sometimes, we survey portfolios in the North, in remote areas, near or inside the jungle. In these cases, it can take up to a full year to survey 200 sites in light of the severe conditions we have to deal with.

On average, I would say Everest is able to survey 2,000 towers in approximately six months.

TowerXchange: What is your production and galvanising capacity? And where is your factory?

We have the capacity to manufacture 3,000 ton/year, with one round. With our present structure we are able to produce up to 6,000 ton/year. That results in our ability to manufacture approximately 400 towers and poles yearly.

Our factory is located in the city of Mairinque in the state of São Paulo, where approximately 40% of Brazilian towers are installed. The state of São Paulo is responsible for 40% of the national GDP and is at the very heart of the telecom industry.

Being close to two major highways, Castelo Branco and Raposo Tavares, gives us an additional competitive advantage in terms of logistics costs.

TowerXchange: How many of your towers are installed in Brazil (or elsewhere in South America)?

To date, we have installed 4,000 towers in Brazil and we have sold towers to Argentina. In fact, we are able to support towercos and carriers throughout the region but we are mainly focused on attending the local demand of the Brazilian telecom market.

In preparation of the World Cup, we installed about twenty camouflaged poles near stadiums and other high density areas. And we predict 2015 to be a big year for this type of projects in light of the upcoming Olympics in Rio.

Beside these big events, urban areas are in need of this type of poles to fully support the rollout of 4G LTE, so we are prepared to serve the industry as the demand grows.

For the future, we hope the Brazilian market will demand an average of 1,000 new sites per month over the course of the next two-three years.

TowerXchange: Tell us about some of the most interesting projects you have completed for clients.

In an urban scenario, we developed 20 poles for Vivo and Claro to be installed in sites with reduced foundations to reduce their visual impact in the state of São Paulo. This is something that our customers are increasingly demanding in light of the limited space available in urban areas.

To provide a completely different example, we were able to install 120 meter high towers right in the middle of the Amazon jungle.

Everest has installed towers in every Brazilian state: from deserted regions to savannahs, rocky areas, jungles and megalopolis.

TowerXchange: How do the strict zoning and permitting regulations in Brazil affect tower and site design?

The current telecom regulation is definitely a bottleneck for the development of greenfield projects. In fact, as each municipality has legislative rights, we have as many as 6,000 different requirements in Brazil, depending on each region.

In order to become a leader in this sector, it is very important to be flexible and highly capable to comply with all different requirements and meet each client’s needs regardless of the difficulties we encounter at a regulatory level.

That said, some states, such as Minas Gerais, are facilitating the process by providing us with clear information about the available locations for sites and speeding up the tower assembly process. These are significant incentives to develop greenfield projects and the demand in that state is definitely growing in light of that.

TowerXchange: How do the requirements of towercos differ from the requirements of carriers?

Towercos are focused on owning towers fit for multiple tenants, which means more loading capacity. Carriers, on the other hand, tend to specify minimum requirements for each tower to host one tenant only, with the exception of backbone towers.

Over the past few months, we have started working with various towercos to either build or re-engineers towers to host multiple tenants. The situation is different for carriers that still perceive towers as a very heavy expense on their balance sheet and request specifications suitable for single tenant towers, especially when reaching out to rural areas where infrastructure sharing isn’t very likely yet.

The trend we see nowadays is towards the construction of multiple tenants towers which represent 60% of our current production.

TowerXchange: How can towers be upgraded for multiple tenants?

For existing towers, we tend to reinforce their metal structure and foundations. This type of reinforcement can upgrade the loading capacity up to 30% or higher depending on how deep of an intervention we make.

We always need to keep in mind that loading capacity is a variable factor linked to wind and ground conditions. For instance, a tower designed to load 12 sqm in the South of Brazil could support up to 18 sqm in the Northeast of the country.

Ideally, new towers that are coming to market should be designed with greater loading capacity in order to allow multiple tenants in the future.

TowerXchange: What quality standards do you use when manufacturing towers, and what standards are most commonly used in Brazil?

Everest is ISO 9001 certified and we have proof of origin of our steel. The most common standards we use in Brazil have been inherited from the U.S. but we also have some specific requirements as ruled by the national telecommunications agency, ANATEL.